Key Points:

• Though less well-known, Stellantis (NYSE: STLA), the maker of Jeep, Chrysler, and Dodge, has major issues including U.S. factory closings and layoffs.
• Job losses indicated by Stellantis at a Jeep facility point to more serious problems possibly causing brand selling off like Chrysler and Dodge to be threatened.
• Strong local competition in China is causing Western manufacturers like BMW, Mercedes-Benz, and Volkswagen to suffer; this is resulting in plant closures even in their home markets.
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Transcript:

[00:00:00] Doug: So no one in the United States has ever heard of one of the world’s largest car companies. It’s Stellantis, and they just almost accidentally ended up owning, they own Jeep, Chrysler, and Dodge, which all used to be part of Chrysler, which all used to be part of Mercedes. This thing has changed hands so many times, it’s insane.

[00:00:21] Doug: So right now, Stellantis is in the United States with Ram, Dodge, Jeep. Chrysler. It’s just getting, it’s getting the SN kicked out of it. and you’ve got, you just got some news about layoffs.

[00:00:35] Lee: Well, there’s a Jeep plant. I mean, it’s one thing when a, a sedan like the 300 closed down, but there’s a Jeep plant that’s being, they’re laying off 1100 people and that those layoffs are indefinite, not, which means, and you know what indefinite means in the car industry?

[00:00:56] Lee: That may be forever.

[00:00:57] Doug: It means forever. No, it doesn’t. It’s just put it up in a dictionary. It’s our company indefinite forever.

[00:01:04] Lee: And this is getting worse and worse. And we, we had a section or a session about a month ago where, we told everybody that Stellantis, there was, they were rumored to be.

[00:01:18] Lee: Thinking about laying off half of the domestic workforce. And if that happens. oh look for another, buyer of Chrysler Dodge Jeep. Because they’ll shoot it. They’ll kick it and ’cause they have other, the Alpha Romeo and .

[00:01:34] Doug: Yeah, no, listen, they’ve got a good moat in, in, in the EU. They,

[00:01:38] Lee: Yeah, they do. Yeah. I mean, they’re successful there. But I’ll bet you anything. And, this could be just a wild hair, but I’ll bet you still Antus may listen to offers for Chrysler Dodge.

[00:01:52] Doug: Yeah. It wouldn’t surprise me, but listen, this is now part of a series. BMW just announced they got kicked in the teeth.

[00:02:00] Doug: Mercedes got kicked in the teeth. You, basically what’s happened is, The Chinese are squeezing them in China. It used to be that being a Western car company in China, you had to have it be a JV, with one of the local companies, it was still a license to mint money. I mean, VW at one point and Ford were making more money in China than they were in their home markets.

[00:02:24] Doug: Now you’re looking at VW closing three plants in Germany. I mean, it’s home market where it was started.

[00:02:31] Lee: They’d never closed a plan.

[00:02:36] Doug: And it’s one of those rare companies where you, the unions have seats on the board. So, but they can’t stop it. It doesn’t matter who’s on the board right now. The legacy car companies in the United States and Europe are in nosedives and there’s nothing investors see where they can pull the nose up.

[00:02:55] Doug: They can’t stay in China. There’s no way in their home markets. They don’t know whether to make a few bees or make gas powered cars. And this only gets worse. Okay. Yeah.

[00:03:07] Lee: and EVs, they’re crushing the other good products, good sales products that they have and they’re wearing every PNL, every balance sheet down to the ground because it’s a losing proposition and now even in europe They’re starting to back up on the dealer’s lots.

[00:03:26] Lee: Then what do they do give them away?

[00:03:28] Doug: Listen i’ve got a guy who does some work with us. He just got a mustang mach e Okay, the first thing they did at the dealer was offer him 10, 000 off the MSRP. That’s when you walk through the door, right? After that, it’s just a question of whether you get the free electric windows and the, the cigarette lighter and stuff.

[00:03:50] Lee: And, the charging thing for your garage.

[00:03:53] Doug: And, here to me, this little story tells you everything. Oh, yeah. The Ford F-150 volume dropped 50% in October. The lightning, the EV version compared to October of last year, dropped by half.

[00:04:08] Lee: Right.

[00:04:09] Doug: At the same time, sales are just the gas powered F-150. We’re up by over 10%. People don’t want an electric Ford. They don’t want it. Right now, the F-150 gas powered car, what’s called the F Series? Yes. It’s 38% of Ford’s unit sales in the United States. And those things, they eat more gas than anything in the world.

[00:04:31] Lee: They’re just the big one. The big ones too. Oh my God.

[00:04:33] Lee: It like 10 gallon

[00:04:35] Doug: on the

[00:04:35] Lee: Yeah.

[00:04:36] Doug: Yeah. F 250 or whatever it’s called.

[00:04:38] Lee: Yeah. and you know what, where I live here in, in the deep South, they’re everywhere. Everywhere. And you know what, it, makes sense that Stellantis could be in big trouble because. Jeep is one of the better performing parts. Oh, sure.

[00:04:52] Lee: Like we’ve discussed it is a solid number two to the f 150 And but if they’re laying off people at the jeep plant, oh

[00:05:03] Doug: Jeep was really a and has been a money maker for a long time. Yeah would look at the car companies the legacy car companies this way even at these lower prices.

[00:05:13] Doug: They may be shorts. Even I, understand they’ve come down, but if the Chinese EV companies get even a tiny leg into Mexico and use NAFTA to get into the United States or Germany gets what it wants, which is lower tariffs on Chinese EVs, it’s just going to be, they’re going to come in and they’re going to slaughter the traditional car company.

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